5 ADVISORY COMMISSION ON ELECTRONIC COMMERCE
11 CONFERENCE CALL MEETING
18 Arlington, Virginia
19 Tuesday, September 7, 1999
1 P R O C E E D I N G S
2 (2:04 p.m.)
3 GOVERNOR GILMORE: First of all,
4 welcome. Was there roll call being taken
5 when I joined the call, or has that been
7 MR. DeFEND: No, sir. We were in
8 the midst of the roll call, actually. I
9 believe that we are missing Mr. Andal, and I
10 don't believe he'll be joining us until
11 later. I don't believe that Governor Locke
12 is on the line.
13 MR. KIGA: Fred Kiga for Governor
15 GOVERNOR GILMORE: All right. Let
16 me first of all begin by welcoming everybody.
17 Mr. Andal, by the way, will not be joining us
18 until about 2:30, and then he will be on the
19 line. We understand David Pottruck only has
20 a few minutes because he's breaking up
21 another meeting, so we'll get down to this as
22 quick as we can.
1 Welcome very much to the meeting.
2 The meeting was called in order for the Work
3 Plan Subcommittee to present its plan to the
4 full Commission. Under the Commission rules,
5 we're not able to nor should we hold any kind
6 of formal vote on this teleconference. Votes
7 are restrained to person-to-person meetings
8 of the Commission, and, of course, we'll be
9 doing that next week in New York.
10 But this is a time for Mr. Pottruck
11 to outline the work plan and to get
12 everybody's comments or concerns and to
13 address all those matters. We will have a
14 formal vote on adoption of the work plan in
15 New York City.
16 Let me remind all of you who are
17 members of the Work Plan Subcommittee in
18 addition to myself, Dean Andal, Mike
19 Armstrong, Joe Guttentag, and all of the
20 others, as a reminder let me remind you that
21 under the rules only Commissioners may
22 participate in this meeting. This is a
1 formal meeting of the Commission duly noticed
2 that we have on the line here.
3 We certainly welcome all surrogate
4 staff members, et cetera, et cetera, and
5 that's just fine. We certainly would ask you
6 to take your notes and to communicate
7 directly with your Commission member on any
8 matters. But since we have up to 19 members
9 that will be on the phone line at one time or
10 another, we would like to designate
11 Commission members to do the talking, as
12 indeed is the case at all Commission
14 I would ask that everyone please
15 identify yourself at the time that you speak
16 so that we know who we're talking to. Also,
17 that's good for the transcription and the
18 record. The meeting is being audiocast on the
19 Commission's web site and is also being
20 transcribed, and a copy of the transcription
21 will be posted on the Commission's web site
22 tomorrow. So please just say your name at
1 the time you begin to speak, and then we'll
2 have everybody captured by the transcriber.
3 Let's begin by asking each of the
4 Commission members to please chime in, tell
5 us that you are here, and announce yourself,
6 if you please.
7 MR. LEAVITT: Mike Leavitt,
9 MR. NORQUIST: Grover Norquist,
11 MR. GUTTENTAG: Joe Guttentag here.
12 MR. SIDGMORE: John Sidgmore here.
13 MR. PITTMAN: Bob Pittman here.
14 MR. PARSONS: Dick Parsons here.
15 MR. LEBRUN: Gene Lebrun here.
16 MS. JONES: Delna Jones here.
17 MR. SOKUL: Stan Sokul here.
18 MR. PINCUS: Andrew Pincus here.
19 MR. POTTRUCK: Dave Pottruck here.
20 GOVERNOR GILMORE: Any other
21 Commission members on the line? Okay. Maybe
22 some others will be joining us as they come
1 in, and hopefully they will announce
2 themselves by something besides the little
3 melodic beep that comes into the telephone.
4 It's my pleasure now to turn the
5 meeting over to the Work Plan Subcommitte
6 Chairman, David Pottruck. David, thank you
7 for all the work you've done and please
9 MR. POTTRUCK: Thank you very much,
10 Governor. Good morning, everyone, good
11 afternoon on the East Coast. So let me go
12 over our recommendation to the Commission.
13 First of all, I'd like to thank
14 everybody who participated in the efforts.
15 We had two conference calls, each one lasted
16 roughly about an hour, an hour and 20
17 minutes, and we talked about how we can
18 organize the work of the meeting in New York
19 and in San Francisco and in Dallas. We also
20 have sent out to all of you our outline of
21 what our plans look like.
22 Specifically, by the way, the
1 members of the subcommittee, we had about 10
2 members of the Commission, not including
3 myself and the Governor, so altogether there
4 were 12 of us who participated with staff in
5 putting together our recommendations, and I
6 think, Governor Gilmore, you'd agree that
7 there was a lot of lively debate and
8 discussion, a lot of input.
9 And I think we've come up with a
10 good product which we have sent out to all of
11 you and which we can talk about today, and I
12 hope there will be some more discussion and
13 input today as people would like to jump in
14 and offer their points of view.
15 It's been an interesting discussion
16 for me because certainly this is a broad
17 topic area, and we had wide-ranging
18 discussions in Williamsburg, and I think
19 we've tried to go from the very broadest
20 perspective into something a little more
21 manageable. I think all of us have looked at
22 the work we have ahead of us and recognize
1 that, given the amount of time we have both
2 in terms of the time between now and a report
3 being produced as well as the amount of time
4 we have collectively together, the amount of
5 work is daunting.
6 And, therefore, we've tried to
7 force upon ourselves the discipline of
8 narrowing down the work into some more
9 tangible and perhaps a little narrower focus
10 than many of us would like. There's a rich
11 set of issues to be discussed in the topic of
12 the Internet, and so many of us are
13 completely consumed by the issues that we
14 recognize there's a lot we have to leave off
15 the table, but I think we have no choice but
16 to go in that direction.
17 So let me be specific about the
18 work plan and the process and the goals that
19 we have in store for you. Having already
20 sent out a memo, I don't want to be
21 completely redundant, but let me just offer
22 some highlights.
1 Our belief is that discussion at
2 the New York meeting will focus on three
3 primary topics, and the majority of the
4 meeting time will be comprised of
5 Commissioner dialogue with some time
6 available for some brief presentations by
7 outside groups. As you see in the written
8 materials, we've tried to be very limiting on
9 the outside groups.
10 We think that the Commission itself
11 was formulated to represent the broadest
12 views, and we have a lot of expertise in our
13 Commission members, and we want to make sure
14 that we have plenty of time for Commissioner
15 dialogue, and I'm sure that dialogue will be
16 very robust because of the broad spectrum of
18 But we can be informed by some
19 outside presentations. There's an enormous
20 number of people who would like to come and
21 present. Governor Gilmore and his staff have
22 taken upon themselves to ask for
1 recommendations from all of us, but they will
2 narrow them down to a tighter list. We'll be
3 asking for presentations of not more than
4 five minutes in length with a robust
5 question-and-answer period, and all
6 presenters must also give us a 2-page
7 executive summary of their topics.
8 Also, I think many other experts
9 will be offered the opportunity to come and
10 participate as resources so that we can turn
11 to them and ask for opinions if we get into
12 areas where greater expertise would add to
13 the dialogue. The discussion in New York
14 will be distilled into an issues and policy
15 options document which Commissioners will
16 have the opportunity to review and comment on
17 prior to the San Francisco meeting.
18 So there is a drafting process
19 coming out of New York, and it lays out what
20 the big issues are and what our options are.
21 We have to discuss in New York who is going
22 to do that drafting. Obviously, that's very
1 important. What kind of a structure and
2 process do we want? That's also part of our
3 New York discussion.
4 We would probably have one or
5 several conference calls between the New York
6 and the San Francisco meeting of whatever
7 group is working on this document. I think
8 we would say that the two conference calls
9 we've had thus far are concise and
10 productive. I hope people feel that way, and
11 I think we can get a lot done with the proper
12 distribution of written documents and then
13 with our conference calls without having to
14 travel places.
15 The primary objective, then, of the
16 San Francisco meeting will be for the
17 Commissioners to discuss the array of issues
18 and policy options contained in the document.
19 (interference) expectation that our document will be
20 agreed upon, or we will have a sense of where
21 the agreement is and where our points of
22 disagreement are coming out of our San
1 Francisco meeting.
2 The document would then serve as a
3 springboard for the final recommendations of
4 the Commission, and we will have to decide
5 whether the document coming out of San
6 Francisco is considered an interim report or
7 simply a draft of the final report, and we
8 will also discuss in San Francisco what
9 processes we need to go from that draft to
10 the final report. The final report will be
11 distributed in Dallas. I would say still
12 it's a draft of the final report.
13 There are opportunities for debate
14 and discussion and to confirm with all the
15 members present that we in fact have a
16 consensus around all of our recommendations.
17 I think we have a governance process that's
18 very specific about what constitutes a
19 recommendation and a consensus, and we will
20 strive toward that kind of a consensus,
21 recognizing that oftentimes we will not be
22 successful with unanimity, I'm afraid.
1 And I think our goal clearly is to
2 have our final report published and forwarded
3 to Congress no later than April 21 of the
4 year 2000.
5 So, Governor Gilmore, I think that
6 is what we have talked about as a Work Plan
7 Committee, and I turn it back over to you,
8 Governor, to run this call and to solicit
9 input from our Commissioners on that
11 GOVERNOR GILMORE: David, do you
12 have time to remain on the line for any
13 questions, or do you need to depart now?
14 MR. POTTRUCK: No, I can stay on
15 this call for another 30 minutes.
16 GOVERNOR GILMORE: Oh, terrific.
17 That's great. Ladies and gentlemen, that
18 gives you a summary of it, and, of course, I
19 think my staff and personally a majority of
20 the Commission had participated in the
21 formulation of the work plan. Those that
22 were neither there in person nor by staff at
1 least have an opportunity now to (unitelligible) David
2 Pottruck's presentation of it.
3 First of all, are there any
4 questions for David? Are there any questions
5 for David Pottruck by any Commission member?
6 No questions for Mr. Pottruck?
7 UNIDENTIFIED SPEAKER: Sounded
9 GOVERNOR GILMORE: Well, that's
10 great. Now let's ask whether there's any
11 sort of comments or suggestions or commentary
12 that anybody would like to make as part of
13 the Commission on the work plan that we've
14 got right now. If so, please identify
15 yourself and proceed.
16 MR. LEBRUN: Governor, I noticed
17 under the format of the New York meeting
18 requesting that the written submission from
19 the presenters and experts be made by today
20 at 5:00 p.m. Have the presenters been
21 identified? Are they aware of that deadline,
22 which is today?
1 GOVERNOR GILMORE: We propose to
2 push back that deadline until Thursday to
3 give the presenters an opportunity to present
4 their 2-page plans and proposals, and, yes, I
5 believe that all presenters have been spoken
6 to and are aware that they are on their way
7 to New York.
8 MR. LEBRUN: When will those names
9 be released to the members of the Commission?
10 GOVERNOR GILMORE: I'm happy to go
11 through them right now, as a matter of fact.
12 Let me, first of all, say that there was a
13 large number, and we tried to get this down,
14 the objective of the exercise being to give
15 everybody a fair chance to have their point
16 of view heard. And let me talk to you, and I
17 think you'll hear when I tell you who has in
18 fact proposed these people, that pretty much
19 everybody on the Commission who's made a
20 suggestion has had a chance to have some
22 The issue of telecom cable access
1 is the first issue, I believe, on the agenda.
2 First of all, we've invited Annabelle
3 Canning, the vice president of the Committee
4 on State Taxation, proposed by Mr. Armstrong;
5 Bob Herbold, the COO of Microsoft, by
6 Mr. Pittman; Raymond Keating, Small Business
7 Survival Committee, by Mr. Norquist; and
8 Charles Brewer, the CEO of Mindspring by
9 myself, although we're not sure whether he
10 will be able to come.
11 Now, on the large issue, as we had
12 previously discussed and if you look at the
13 agenda, there is about five hours set aside
14 for the large issue of local, state, and
15 federal tax issues. While on the telecom
16 cable and access issues very few people were
17 put forward, a very large group was put
18 forward for this other major topic of local,
19 state, and federal taxes.
20 I have invited Bruce Josten of the
21 U.S. Chamber of Commerce, my suggestion; Jim
22 Eads of Ernst & Young, on not only my own but
1 Mr. Armstong's suggestion; Carl Griswold, a
2 partner with Peat Marwick, KPMG, by
3 Mr. Andal; William Gregory Turner, the
4 California Taxpayers Association, Mr. Andal;
5 George Isaacson, the Direct Marketers
6 Association, Mr. Sokul; Kaye Caldwell,
7 Commerce Net, offered by Mr. Lebrun and
8 Mr. Sokul.
9 Fran Smith of Consumer Alert by
10 Mr. Norquist; Carol Keaton Rylander or Bill
11 Eggers, Texas Comptroller's Office,
12 Mr. Norquist; Larry DeFranco, he's going to
13 be, I think, there as an expert only,
14 according to what he believes is right.
15 The next one is Harley Duncan, the
16 director of the Federation of Tax
17 Administrators, offered by Governor Leavitt,
18 Governor Locke, and Mr. Lebrun; Matthew
19 Kisber and Steve Rauschenberger of the NCSL,
20 offered by Governor Leavitt, Governor Locke,
21 Mr. Lebrun, and Paul Harris, Delegate Harris.
22 The next is Gary Cornia or Kendall
1 Houghton of the National Taxpayers
2 Association, offered by Governor Leavitt,
3 Mayor Kirk, Governor Locke, and
4 Mr. Armstrong.
5 The next is Alton Adams, the
6 president of Standard & Poor's, offered by
7 Mayor Kirk and Delna Jones; a representative
8 not yet named from the National Association
9 of Counties, the U.S. Conference of Mayors,
10 and the National League of Cities, offered by
11 Mayor Kirk and Delna Jones. Finally, Dan
12 Bucks, the director of the Multistate Tax
13 Commission, offered by Mr. Lebrun.
14 This gives a fair representation, I
15 think, of the people who in fact did offer
16 proposals. I might point out that there were
17 no recommendations specifically for
18 presenters from the other members of the
20 MS. JONES: This is Delna Jones.
21 Governor, I would like to make a change, as I
22 believe Heather has the information, in
1 relationship to the presenters that I and
2 Mayor Kirk recommended. Standard & Poor's
3 report is not going to be ready, so they will
4 not be a presenter. And we have names now
5 for the state and local people that will be
6 presenting, so we can give those to Heather
7 if she doesn't have them already instead of
8 taking other people's time,
9 GOVERNOR GILMORE: Outstanding.
10 We'll be happy to receive that. At five
11 minutes for each one, we're estimating that
12 we'll probably end up at about 12, we think,
13 on this big topic, and when we do that that's
14 about one hour out of the five for presenters
15 and the balance for debate among the
17 The third group that we'll be
18 talking about is international issues, and I
19 have invited Michelle Aujean of the European
20 Union, director of tax policy; Jeffrey Ownes,
21 the OECD, director of fiscal affairs, and
22 those are both offered by Mr. Sokul; and Fred
1 Smith of the Competitive Enterprise Institute
2 offered by Mr. Norquist.
3 I recognize, of course, that our
4 federal brethren here may not wish to engage
5 and put so much public debate on this topic,
6 of that we will be respectful, but I believe
7 that it's pretty important to hear from
8 Mr. Sokul's proposed people.
9 Those are the people. Naturally, I
10 understand that by reading this over the
11 conference call it wasn't so easy for
12 everybody to take it down, but staff people
13 will be faxing you all a copy immediately of
14 the proposed presenters so that you will have
15 them today.
16 MR. LEBRUN: Thank you, Governor,
17 very much.
18 GOVERNOR GILMORE: Any other people
19 who wish to address the topics of the work
20 plan or the New York meeting?
21 MR. PITTMAN: Governor, this is Bob
22 Pittman. I just wanted to thank David for
1 his leadership on the subcommittee and also
2 compliment him on producing a very concise
3 plan and identifying really the three issues
4 that I think most of our discussion will
5 revolve around.
6 MR. NORQUIST: I'd just like to
7 second that thought.
8 GOVERNOR GILMORE: I think we're
9 all very lucky to have had David Pottruck
10 willing to get in there and to go to work on
11 this thing and to get this done working
12 together with so many of the Commission
14 David, thank you very much on
15 behalf of the entire Commission.
16 MR. POTTRUCK: Thank you, Bob, Ed,
17 and Norquist and Governor Gilmore. I
18 appreciate that. I'm lucky to have had a
19 good staff that made it easier for me to do
20 this and have the cooperation of the
21 committee to get this done. Everybody really
22 pitched in and I appreciate that. Thanks.
1 GOVERNOR GILMORE: Other comments
2 from members of the Commission, if any?
3 MR. LEBURN: What's for dinner on
5 GOVERNOR GILMORE: We're going
6 modest this time. I believe a little fast
7 food might be in order, but we'll talk about
9 Well, ladies and gentlemen, that
10 concludes this preliminary discussion. We
11 will take a formal vote on this matter when
12 we get to New York. In the meanwhile, I will
13 look forward to meeting with all of you, and
14 we will have very long and robust two days,
15 I believe.
16 (Whereupon, at 2:24 p.m., the
17 PROCEEDINGS were adjourned.)
18 * * * * *